TNAG-0629-FCO40-777-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1988 — Page 57

CONFIDENTIAL

CONCLUSIONS AND RECOMMENDATIONS

12.

Nonetheless, we have to consider our own relations

with Hong Kong for reasons given above. Action we might take

could involve speaking up on behalf of Hong Kong in the Community;

and allowing Sir Murray MacLehose to return to London and to be

seen to be putting his case to British Ministers. As far as

speaking in the Community is concerned our room for manoeuvre

is limited. No other Member State has much sympathy for Hong

Kong and all believe, as is indeed the case, that Hong Kong has

done very well out of its textile exports to the Community

since the present MFA bilateral was concluded. There is little

mileage to be obtained in the Community in pressing for special

treatment for Hong Kong. The point, however, should be made

to the Commission that to take too tough a line with Hong Kong

runs the risk of a refusal on Hong Kong's part to conclude a new

bilateral agreement with the Community. This in turn risks

bringing down the whole Community approach since Hong Kong is the

Community's largest single supplier. I would recommend that

Sir D Maitland be instructed to have a word on these lines

with Commissioner Davignon.

13.

As far as presentation in Hong Kong is concerned the

Governor has asked that if the "extremist view" is likely to

prevail he should be recalled to explain Hong Kong's case. If

there is no alternative to obliging the Hong Kong Government to

swallow what it believes is bitter medicine, then there is much

to be said for letting Sir M MacLehose be seen to have stated

/Hong Kong's

CONFIDENTIAL